STATE BANKING

Evening Post, Volume C, Issue 23, 27 July 1920, Page 7

STATE BANKING

MR VEITCH ANSWERED,

Mr. W. A. Veitch, M.P., in a speech at Otaki on Saturday, is reported to have said that the Bank of/New Zealand had last year paid a. dividend of 17^ per cent, to shareholders, though the New Zealand Government, which had a large sum of money in the bank, only got 10 per cent. Mr. Veitch is also reported to have said on the same occasion that the cost of floating war loans in the Old Country was £2 7s Id per cent., but that it was only 4s 6d per cent, as through the Commonwealth Bank of Australia.

The Chairman of tho Bank of New Zealand (Mr. Harold. Beauchamp) points oiifc that if Mir. Veitch was correctly reported in' his speech, he weus in error in stating that the Government's return for its shareholding in the Bank of New Zealand was only 10 per cent. It was quite true that the return on the Government's holding of ' (A) preference ska-res was 10 per cent., but tha Government also received 17| per cent, on its holding of (B) shares, the same dividend as the ordinary shareholders receive, (B) shares ranking equally* with ordinary shares as to dividends. Again, Mr. Veitch compares the cost of raising, war loans in London at £2 7s. Id with the Commonwealth Bank cost of 4s 7d per cent. The Chairman of the Bank of New Zealand is under the impression.thai the cost to the Treasury of raising such loans in New Zealnad is from 3s ilto 4s per cent. But had the Government thought it advisable to. raise 'tfhe money through the Bank of New Zealand, it could have raised' it for nothing—except cost of advertising it—and have raised it at par.